New Delhi: The IT stocks were under pressure on 23 February, i.e., Monday. Global brokerage Jefferies downgraded the IT sector, saying that disruption related to Artificial Intelligence (AI) is yet to end. Several major IT stocks declined, which included Mphasis, Infosys, Wipro and others.
IT biggies such as Tata Consultancy Services, HCLTech, and LTIMindtree also traded lower. Meanwhile, the Nifty IT index fell 1.41 percent today. Over the past month, the index has declined around 19.5 percent so far.
In its report, Jefferies said that IT stocks have dropped around 16 per cent since the beginning of the year, and the risk is not over yet. The brokerage projected the that IT sector could witness a downside of 30 to 65 percent from current levels if the impact of AI on the sector turns out to be deeper. The brokerage has reduced its EPS estimates by 1 to 4 percent and cut target prices of several stocks by up to 33 percent.
Jefferies downgrades TCS, Infosys, Mphasis & more
- Jefferies has downgraded Tata Consultancy Services, Infosys, LTIMindtree, Hexaware Technologies, HCLTech, and Mphasis.
- The brokerage has downgraded Infosys and HCLTech from Buy to Hold.
- Infosys’ share target price has been reduced from Rs 1,880 to Rs 1,290.
- HCLTech’s share price target has been slashed from Rs 1,885 to Rs 1,390.
- TCS, LTIMindtree, and Hexaware have been downgraded from Hold to Underperform.
- TCS share target price has been reduced from Rs 3,485 to Rs 2,350.
- LTIMindtree share target price has been reduced from Rs 6,175 to Rs 4,300.
- Hexaware’s target has been reduced from Rs 660 to Rs 460.
- Mphasis has been downgraded from Buy to Hold, and its target has been cut from Rs 3,410 to Rs 2,450.
- Wipro share price target has been reduced from Rs 220 to Rs 180.
Jefferies backs Coforge, Sagility
Jefferies believes that in the near future, stock movement will depend more on the long-term business outlook than on recent financial results. The brokerage has projected around 6 percent EPS CAGR for large IT stocks during FY26 to FY28, which is 3 to 14 percent lower than market estimates. However, Jefferies is more positive on mid-sized IT companies. Notably, the brokerage has advocated for Coforge, Sagility, and IKS.
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